Deep Value Driller : Q2 2023 report

Deep Value Driller AS Q2 2023

Q2 2023

OVERVIEW CONTENT

• Comments from the Board of directors
• Status rig
• Key Figures
• Financial statement
• Notes
• Disclaimer

Comments from the of directors

Main events 1st half year 2023

In January 2023, the company signed a bareboat charter for the Drillship "Deep Value Driller" with Saipem as Charterer. The Charterer will utilize the Drillship for operations on the Ivory Coast under a drilling contract with Eni Côte d'Ivoire Ltd. The Contract is a firm 11 wells contract with an estimated period of 985 days (excluding mobilization/demobilization). The Contract may be extended by up to six additional wells. The Contract adds approximately USD 160 million of firm revenue backlog to the Group (excluding the rate payable for any optional extensions of the Contract).

In February 2023, Deep Value Driller Ltd. entered into a USD 75 million loan facility agreement. The company's USD 10 million credit facility was refinanced, and remaining balance dedicated for reactivation costs plus ordinary operations costs.

The Drillship has since end of January 2023 been undergoing an intensive reactivation project. Sea trials were finalized last week, and we expect that the Drillship will be delivered to the Charterer any day mid August. The forecasted reactivation cost was USD 43.6 million. Increased market activity globally and high price on fuel and shore power have caused increased costs. Additionally, we experienced an unforeseen and temporary relocation of the Drillship during reactivation which added costs of approximately USD 4 million. Finally, the general increased cost and higher activity have led to cost inflation and today the total project cost is estimated to USD 55 million.

Main events going forward

The delivery of the Drillship to the Charterer initiates a mobilization period for the Drillship to relocate to the West coast of Africa. After the mobilization period the Drillship will commence contractual drilling operations.

At delivery of the Drillship to the Charterer in Norway, DVD will receive daily rates. First, up to 60 days mobilization rates, and thereafter full operation rates or earlier if drilling operations commence during the mobilization period. A mobilization fee of USD 7.5 million will be payable to DVD 30 days after handover of the Drillship in Norway. Thus, the Board evaluates cash flow balance to be satisfactory.

rig

Premiu m 7 th Generation Drillship

Current Vessel Status:

• Reactivation project scope activities are completed at Westcon Yard. The DVD Team is finalizing the acceptance and handover to the Charterer
• Relevant system certification is accepted by Class (DNV), and major equipment groups are accepted by the relevant service providers
• Main activities achieved:
• • Drilling Plant has undergone complete certification and has been accepted
  • Well Control Equipment have been tested, and both BOPs are completely overhauled and recertified
  • Sea trials completed successfully for DP operations
  • Rig Systems such as power plant, fire&gas, DP control system and Emergency Control systems have been certified
• Condition Monitoring System established to assist in monitoring Drilling and DP/Power Control systems in operation

Location:

• Reactivation complete at Westcon Yard in Ølensvåg in Norway. The Charterer will take over the Drillship prior to final departure from Westcon Yard

K e y f i g u r e s

Rig purchase 2021Equipm ent purchase 2021

$65,000,000	$3,663,387
• 7th Generation Drillship	• Maintenance system , p art of initial
• Built in 2014	p urchase
• Build cost USD 750 m illion
Operational cost ITD	Reactivation costs ITD
(Inception To Date)
$23,040/day	$41,582,008
• Average d aily op erational	• Accum ulated reactivatio n cost
cost p r. Q2 2023	p r. Q2 2023

( Form erly labeled 'stacking cost' )